Asian stocks trim weekly losses, dollar steady near 20-year highs by Reuters

Asian stocks trim weekly losses, dollar steady near 20-year highs by Reuters

©Reuters. FILE PHOTO: A man with an umbrella looks at an electronic stock listing board outside a brokerage office in Tokyo April 7, 2015. REUTERS/Issei Kato

By Andrew Galbraith

SHANGHAI (Reuters) – Asian stocks pared losses on Friday after a volatile session for U.S. stocks, while the dollar fluctuated near 20-year highs as investors remain worries about persistently high inflation and the tightening of the economy digest central bank policy.

Those concerns ultimately overwhelmed Wall Street hopes that high inflation might be peaking, pushing Thursday’s confirmation of a bear market down almost 20% from its January all-time high.

In an interview later in the day, Federal Reserve Chair Jerome Powell said the struggle to control inflation “would bring some pain.” And he reiterated his expectation of a half-percentage-point rate hike at each of the next two Fed meetings, while pledging that “we’re ready to do more.”

But after sharp losses the day before, Asian stocks rebounded higher on Friday morning.

MSCI’s broadest index of Asia-Pacific stocks outside of Japan rose 1.5% from Thursday’s 22-month closing low, cutting its losses to about 3% for the week.

Australian equities rose 1.53%, while the stock index gained 2.61%.

In China, the blue-chip CSI300 index rose 0.41% and Hong Kong’s rose 2.21%.

“We had some pretty big moves yesterday and when you see those big moves it’s only natural that we get some retracement as Friday heads into the weekend. There’s not really a new narrative that’s come through,” said Matt Simpson, senior market analyst at City Index.

“I think at some point you will run out of sellers. Not sure if there will be a buying rally right now, possibly a short covering rally ahead of the weekend.”

The upside in equities was reflected in falling US Treasuries, with the benchmark 10-year Treasury yield rising to 2.8895% from a close of 2.817% on Thursday.

The policy-sensitive 2-year yield was 2.5941% after a close of 2.522%.

“In the shape of the US Treasury curve, we don’t see a particularly fresh recession/slowdown signal, just the same consistent significant slowdown projected for H2 2023,” Alan Ruskin, Macro Strategist at Deutsche Bank (ETR:) reads a note.

The US dollar remained near its 20-year high, buoyed by safe-haven demand as Russia fretted over Finland’s plan to apply for NATO membership and Sweden might follow suit.

Moscow called Finland’s announcement hostile and threatened retaliation, including unspecified “military-technical” measures.

The , which tracks it against a basket of currencies from other major trading partners, was slightly down about 0.1% to 104.64. But the dollar was stronger against the yen, which was trading at 128.95 per dollar after hitting a two-week high of 127.5 overnight.

The European single currency was 0.15% higher at $1.0395 after trading lower earlier in the day.

Cryptocurrency Bitcoin also turned higher, breaking through $30,000 after the collapse of TerraUSD, a so-called stablecoin, propelled it to a 16-month low of around $25,400 on Thursday.

In commodity markets, oil prices were higher on the back of an imminent European Union ban on Russian oil but were still set for their first weekly loss in three weeks on inflation concerns and China’s COVID lockdowns slowing global growth. were affected.

rose 1.28% to $107.49 a barrel and the global benchmark rose 1.5% to $109.06 a barrel.

That was pushed to a three-month low by the rising dollar, rose 0.23% to $1,825.86 an ounce.

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